‘You can’t get weak in the knees’: Canadian miners continue to expand abroad despite brutal bear market – by Peter Koven (Financial Post – January 20, 2016)

http://business.financialpost.com/

Canadian miners working abroad just aren’t giving up. Despite a horrendous bear market in commodities, ongoing political risks and serious struggles to raise capital, these firms continue to invest vast sums of capital in mineral assets all over the world.

Canadian miners spent more than $69 billion on foreign projects in 2014, according to the latest data from Statistics Canada. That is roughly in line with the 2013 figures, and is generally more than they were spending per year during the metal price boom last decade.

Mining and metal products consistently make up about 10 per cent of Canada’s foreign direct investment, according to the Mining Association of Canada (MAC). And along with energy and financial services, it is a sector where Canada is a clear global leader.

“Mining is the area where Canada excels abroad, and that’s not going to change,” said Pierre Gratton, president of the MAC.

Obviously, some of the capital being invested today relates to projects that were greenlighted years ago, when the outlook for commodities was much better. And the 2015 totals, which are not yet available, will likely show a decline in overall foreign investment as metal prices weakened significantly over the course of the year. Investment should continue to fall in the future as long as prices are low and capital is scarce.

But the figures show that Canadians remain a force around the world in this industry. There is little indication that companies are bailing out of difficult foreign countries and retrenching back home in Canada, which some investors might expect them to do in such a difficult market. More than 800 Canadian miners had interests outside Canada in 2013, according to Natural Resources Canada.

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